Farallon Capital Management, a San Francisco-based private equity real estate firm, closed its second opportunistic fund on $400 million, the firm said Wednesday.
The firm is planning to invest across property types and US geographies with capital from Farallon Real Estate Partners (FREP) II, but with less weight toward office investments compared with the first fund and more emphasis on apartments and industrial real estate, Rocky Fried, one of the firm’s managing members, told PERE. Farallon typically invests between $10 million and $50 million of equity in each deal, seeking secondary markets with good job growth.
Investors in FREP II included college endowments, high net worth individuals and pension plans, according to Wednesday’s statement. The firm declined to comment on the fundraising process, but PERE understands that 16 out of the 17 investors in FREP I returned to invest in the second vehicle and that firm is targeting a gross internal rate of return of 18 percent to 20 percent. Farallon has not yet deployed capital from the vehicle.
Farallon launched FREP II in September 2015 and held a first close in February on $340 million, Fried said. The original target for the fund was not disclosed. The firm launched its debut fund in the first quarter of 2013 and closed the vehicle in February 2014 on $375 million, PERE previously reported.
“Investors were much more familiar with our team and strategy in raising fund II and we are grateful to have received such a strong reception,” Fried said. “Compared with FREP I’s fundraise, we feel investors are correct to be more focused on where we are in the cycle and being patient about deploying new capital in the current environment.”
Farallon manages about $21 billion in assets, according to Wednesday’s statement.